Galileo Mining’s subsidiaries Norseman Resources and Ganymede Resources have signed a farm-in and joint venture (JV) agreement with a subsidiary of Mineral Resources (MinRes) to sell 30% of all lithium rights on the Norseman tenements in Western Australia for $7.5m.
Under the agreement, MinRes will pay an initial $5m to Galileo within five days of executing the agreement.
The remaining $2.5m is scheduled for payment within one year of the deal's signing.
This JV arrangement will enable both entities to collaboratively explore and potentially develop the lithium assets.
The agreement further allows MinRes to increase its stake to 55% by solely funding an additional $15m in exploration expenses over the next four years.
Additionally, it has the option to elevate its interest to 70% by covering all expenses up to the decision to commence mining operations.
Should MinRes' interest reach 70%, Galileo will have to decide whether to contribute to development costs or convert its remaining interest into a royalty.
During the earn-in period, MinRes will assume the role of operator and manager, with Galileo providing consultation.
A management committee will be established to oversee the JV, comprising representatives from both MinRes and Galileo.
This committee will be responsible for discussing and guiding the technical, operational and financial aspects of the exploration activities on the Norseman tenements.
Galileo managing director Brad Underwood said: “We are excited to add a lithium exploration joint venture to our ongoing exploration programmes for PGEs and nickel at our Norseman Project. The Norseman Project has excellent lithium potential and is strategically located in the world’s most prospective region for lithium.
“The project’s outstanding location relative to existing infrastructure provides a short cut to development for any lithium resources discovered through the joint venture.
“Galileo will benefit from a focussed programme of lithium exploration by MinRes, one of Australia’s pre-eminent lithium companies, as well as increasing our cash reserves to aggressively pursue other high-value resource discoveries at both our Norseman and Fraser Range projects.”
